High Returns on Pot Stocks

Joel Bowman: Last time you and I caught up, we spoke about some of the creeping threats to liberty both in Europe, where you are currently traveling, and also in the United States.

Thankfully, not all civil liberties are receding in the same way or at the same time. In fact, there’s been a lot of talk lately about the so-called “Green Revolution” in marijuana, especially in Canada and the U.S.

You’ve been at the forefront of the opportunities in that sector, particular with regards to the attendant investment implications there. Perhaps you care to speak a little about that?

Nick Giambruno: Firstly, it’s truly an amazing thing just how much utility to mankind comes from this little plant. At the same time, it’s also a disgrace that so much potential medical research into that same plant, which has so many obvious medicinal benefits, has been so stunted over the decades because of a senseless drug policy.

We know beyond a doubt that compounds found in cannabis are very, very effective in treating epilepsy, particular in children who have severe cases of the condition. Nevertheless, because cannabis has been made illegal, we’ve only recently been allowed to use cannabis byproducts in treating this terrible disorder. Even though it’s proven to be far more effective than many of the completely legal alternatives.

And this is just one of the many medicinal benefits of this plant.

The cannabis plant contains over 100 different cannabinoids. These are chemical compounds that react with cannabinoid receptors in the nervous and immune systems. The most well-known of which is Tetrahydrocannabinol (THC) - the one that gets you high.

But there’s much, much more to the plant. For instance, there’s another cannabinoid called Cannabidiol (CBD), has a wide range of medicinal applications, including the treatment of epilepsy, which I mentioned above.

Just imagine what we would know – how many sick people could have been helped, their pain alleviated – if the state hadn’t basically inhibited research into this plant going all the way back to the 1930s.

This is exactly why Doug Casey calls the FDA the Federal Death Authority.

A truly free society and free market would never tolerate this prohibition nonsense.

Joel Bowman: Right, killing one’s customer base is not generally considered best practice for private businesses…especially as they must compete with businesses that, you know, do not kill their customers.

The state, on the other hand…

Nick Giambruno: Joel, this is a perfect example of how the state distorts not only the financial market but also the medical research market and pretty much any other market it touches.

Now that we’re starting to see the state begin to repeal some of these ridiculous laws, I think we’re going to see a real wave of research and knowledge in the space. I’m very, very bullish here.

Moreover, we’ve been talking only about the medicinal benefits of the plant. Of course, there are all sorts of recreational products that are likely to come to market – oils, infused beverages, edibles, obviously the various ways of smoking it.

Then there are the various industrial uses to consider. Hemp, which is the cannabis plant, is a great substitute for cotton. It’s much easier to grow, much friendlier on the environment and uses far less water. Nonetheless, it’s been needlessly restricted because it’s seen as being part of this “evil” plant.

Thankfully, I think this rubbish is all coming to an end. And the sooner the better.

Joel Bowman: I couldn’t agree more. It’s interesting to hear you talk about the squandered potential in the form of research that has been retarded because of cannabis prohibition. Of course, there’s also the other glaring opportunity cost to consider – the $50 billion dollars annually that goes toward fighting the endless drug war.

That’s not to mention the countless lives that have been ruined in the process.

Nick Giambruno: In my opinion, the War on Drugs is nothing less than a crime against humanity. For one thing, possessing a plant is a fake crime.

One of the things I’m sure you’ve noticed in your travels around the world – something that constantly occurs to me and that has helped crystalize my thinking in many ways – is the difference between breaking a law and committing a real crime.

I would define committing a real crime as an aggression against people or their property. If there is no victim, there is no crime. Simple. In fact, the very concept of “victimless crime” is an oxymoron.

So people talk about the crime of being in possession of a plant? Are you kidding me? Arrested and jailed for simply having a plant? It’s utterly ridiculous.

And remember, many of the people who are being jailed for this non crime end up doing more time than people who do commit actual aggressions. It’s the height of insanity.

In reality, initiating the use of force against people simply for possessing a plant is the real crime. The real criminals in the War on (some) Drugs are the employees of the State.

Moreover, the DEA and the rest of the various government drug agencies come at an enormous cost, because their wages and budgets must be extracted – by taxation – from productive parts of society.

So just as the state has stunted research into the many potential benefits of cannabis, it has also stunted economic development and progress elsewhere to fund their crazy, immoral drug wars.

Joel Bowman: It might be comedic if it weren’t so utterly tragic.

Taking a look at the cost in real (inflation adjusted) dollar terms of the War on Drugs since Nixon kicked it off back in 1971 – the same year, incidentally, that he severed the greenback’s last tether to gold – we’re looking at roughly $1.4 trillion dollars spent to date.

Some back-of-the-envelope math reveals that to be roughly the same amount that it would take to employ 20 million registered nurses for an entire year. Hardly a trivial sum.

Still, since the tide appears to be turning, you’ve been concentrating on the investment opportunities lately washing ashore. Obviously you can’t divulge any specific company names, in deference to your paid readers, but could you perhaps give us an idea of how you go about selecting quality names in the field?

Nick Giambruno: Similar to what we’re seeing in the crypto space, and indeed any market that gets hot, there’s basically a whole bunch of new names coming on the scene at once. This is really a newly legal market, where all of those hundreds of billions of dollars that had previously been underground are coming to see the light of the day. It’s going to be huge.

When you consider the medicinal, recreational, therapeutic and industrial uses for cannabis, we’re looking at a market that is going to be far larger than alcohol, soft drinks, tobacco… it’s going to be a new giant global industry.

So I spend a lot of time on the ground researching these companies. We’ve been following the space very closely so we know the quality players. So far, those stocks have done very well and I expect they’ll do even better in the future as developments occur. In fact, I expect developments to occur imminently. Canada has already fully legalized cannabis, becoming the first large, industrialized country to do so.

The U.S. is certainly moving in that direction too, and quickly. Even at the federal level. I expect we’re going to see some very big developments in the next year or two. That will deliver some real profit opportunities for those paying attention.

Joel Bowman: Thanks for your time today, Nick. Here’s to your readers’ profits and to the end of prohibition.

Nick Giambruno: My pleasure, Joel. Until we talk again.

Editors note: Clearly, there are many strange things afoot in the world. Distortions of markets, distortions of culture. It’s wise to wonder what’s going to happen, and to take advantage of growth while also being prepared for crisis. How will you protect yourself in the next crisis? See our PDF guide that will show you exactly how. Click here to download it now.